STATE FARM REPORTS DROP

State Farm Insurance Cos., the nation’s largest personal lines insurer, announced Feb. 28 that its net income dropped 60 percent in 2000 due to a combination of increased claims and reduced rates. Net income from all sources, after federal income tax, for all State Farm affiliates (including non-insurance affiliates) was $408.1 million in 2000, down $626 million from 1999. Revenue, which includes net investment gain and other income, for all affiliates was $47.9 billon for 2000, an increase of $3.2 billion over the 1999 figure. State Farm’s auto insurers—State Farm Mutual Automobile Insurance Company, State Farm Indemnity Company and State Farm County Mutual Insurance Company of Texas—reported 2000 earned premiums of $25.1 billion, an increase of 1.0 percent from 1999. With an underwriting loss of $3.6 billion, a record-breaking $1.0 billion dividend to policyholders and a net investment gain (including capital gains) of $5.4 billion, net income from all sources after federal income taxes was $557.6 million. The three auto insurance companies reported 2000 incurred claims and loss expenses of $23.2 billion, up from the 1999 figure of $21.4 billion.